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FCC sides with telecom giants in vote to cap 5G fees

The Federal Communications Commission on Wednesday approved a new rule that would limit what fees local authorities can charge wireless providers as the industry builds out its next-generation networks, known as 5G.

All four commissioners offered support for the rule, with Democrat Jessica Rosenworcel dissenting over only part of the proposal.

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Companies like Verizon and AT&T are competing to bring new 5G service in the years to come, an endeavor that will require a massive deployment of hardware across the country. Unlike 4G signals, which can be transmitted for miles by large cell towers, the next generation’s waves can only travel short distances and will require small cell stations every few city blocks.

In order to install these refrigerator-size stations, wireless providers will need to negotiate access to utility poles and other public assets. The order approved on Wednesday would cap what municipalities can charge for rights of way and limit the amount of time that local authorities can take to review businesses proposal for deploying wireless infrastructure.

When the new rules take effect, local officials will have 60 to 90 days to review installation requests.

Republicans on the commission say that limiting what they see as exorbitant fees in major cities will free up capital for companies like Verizon and AT&T to invest in building out their networks in underserved rural areas. The commission estimated that the rule will save wireless providers $2 billion.

According to an FCC study, wireless companies pay about $500 in fees per pole every year.

"Cutting these costs changes the prospect for communities that will otherwise get left behind," said Commissioner Brendan Carr, adding that eliminating the fees will speed up deployment and help "close the gap" with China, which is also racing to deploy 5G.

Wednesday's rule is part of the government's broad efforts to encourage 5G deployment. Lawmakers on both sides of the aisle have touted the importance of beating other countries to full deployment, and the Trump administration has even emphasized the issue as one of national security.

“Today, the FCC took the next step to further strengthen the United States’ lead in the race to 5G by adopting a framework for permitting and fees that will foster more widespread and robust infrastructure investment,” Joan Marsh, one of AT&T’s top public policy executives, said in a statement.

“We are excited about our continued expansion of our small cell facilities to bring advanced wireless technologies and services to communities across the country.”

But some critics think that the rush is leading to careless deregulation that will exacerbate the "digital divide" between those who have access to fast internet and wireless capabilities and those who don't.

The proposal generated significant opposition from mayors and other local officials around the country, who accused the FCC of overriding their authority to regulate the rollout of the new technology.

"This is extraordinary federal overreach," Rosenworcel said. "I do not believe the law permits Washington to run roughshod over state and local authority like this and I worry the litigation that follows will only slow our 5G future."

Critics also say that there’s nothing in the order that incentivizes companies to reinvest the money they save on local fees to expand internet access and that they're just as likely to spend the money on share buybacks or paying dividends to stockholders.

"All that it really accomplishes is transferring wealth from cities that use the funds to pay for cops and fire departments and teachers to big wireless carriers," Blair Levin, an industry adviser and former Democratic FCC official, told The Hill in a phone interview. "And those wireless carriers get a lot of the benefit whether they do anything or not — they don't have to deploy a single thing."

The order is sure to face a court challenge from municipal groups, some of whom have already promised a lawsuit. Major cities like Los Angeles and Philadelphia had urged the FCC not to move forward with the proposal.

On the eve of Wednesday's FCC meeting, a group of House Democrats also wrote FCC Chairman Ajit Pai (R) asking him to call off the vote, arguing that it risks "hamstringing cities and municipalities."

Los Angeles Mayor Eric Garcetti (D) sent a letter to Pai last week, urging him to revise the order. Garcetti said that the rules would retroactively upend agreements that his administration had already reached with Verizon and AT&T to begin deployment on Oct. 1.

“It will insert confusion into the market, and sow mistrust between my technology team and the carriers with whom we have already reached agreements,” he wrote.

“The Commission, while staying true to its commitment to promote 5G deployment, could avoid marketplace confusion by simply grandfathering in any proposal or formal agreement entered into prior to the effective date of the order.”